Overview of IMF Engagement:
Since joining the International Monetary Fund (IMF) in 1958, Pakistan has drawn SDR21.789 billion (approximately $31.1 billion) from the Fund, out of an allocated SDR29.673 billion. This was disclosed by the top official of the Economic Affairs Division (EAD) during a parliamentary panel meeting on Thursday.
Special Drawing Rights (SDRs):
- Creation and Allocation: SDRs, an international reserve asset, were created by the IMF in 1969 to supplement its member countries’ official reserves. A total of SDR660.7 billion (about $943 billion) has been allocated globally.
- Largest Allocation: The IMF approved an unprecedented SDR456 billion on August 2, 2021, effective from August 23, 2021, to address global reserve needs and support countries affected by the COVID-19 pandemic. The SDR value is based on a basket of five major currencies: the U.S. dollar, euro, Chinese renminbi, Japanese yen, and British pound sterling.
Interest Payments and Historical Context:
- Interest Payments: Since 1984, Pakistan has paid SDR2.815 billion in interest to the IMF.
- Programs and Facilities: Pakistan has participated in 24 IMF programs since 1958, with the latest being the 2023 Stand-By Arrangement (SBA). The country has also accessed special IMF facilities for events such as the 2010 floods and the COVID-19 pandemic.
Current Financial Standing:
- Outstanding Amount: Pakistan currently owes an outstanding principal amount of SDR6.369 billion.
Multilateral and Bilateral Projects:
- Project Funding: Dr. Kazim Niaz, Secretary for the Ministry of Economic Affairs, provided details on 298 projects funded through multilateral and bilateral sources. These include:
- Multilateral: 63 projects funded by the World Bank, 54 by the Asian Development Bank, six by IFAD, 14 by the Islamic Development Bank, and 21 by the European Union.
- Bilateral: Funding sources include China (16 projects), Korea (15 projects), Saudi Arabia (13 projects), and other contributors like Italy, Germany, France, and the UK.
- Notable Projects:
- Dasu-Islamabad Transmission Line: $700 million commitment, with $112 million disbursed, expected to complete by June 30, 2025.
- Tarbela Four Expansion Project: $390 million commitment, with $159 million released, expected to finish by September 30, 2027.
Committee Recommendations and Concerns:
- Project Details: The committee recommended the EAD provide details on completed or closed projects since 2002 and update progress reports. They also plan to review projects sector-wise to determine completion status and address delays.
- IPPs Proposals: Chairman Abro questioned the handling of Independent Power Producers (IPPs) proposals, citing issues with existing agreements.
- Foreign Exchange Reserves: Dr. Niaz noted that Pakistan’s foreign exchange reserves include $4 billion from China and $5 billion from Saudi Arabia.
The meeting was attended by Senators Taj Haider, Kamil Ali Agha, Rana Mahmood ul Hassan, Dr. Kazim Niaz, and other senior officials.
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